US retail and consumer deals insights: Q3 2016 update

Overview

In Q3 2016, the retail and consumer deal value was $34.5 billion – the highest quarterly deal value recorded in 2016. The increase was driven by more high value megadeals (transactions exceeding $1.0 billion) when compared with previous quarters. This quarter saw eight megadeals with a total value of $26.3 billion compared with six megadeals totaling $12.6 billion in Q2 2016. However, 2016 year-to-date deal value declined 53% compared with the same period in 2015. This was driven by a significant decline in megadeal value. The first three quarters of 2016 and 2015 had 21 and 22 megadeals respectively, but 2016 megadeal value totaled $56.5 billion whereas 2015 megadeal value totaled $143.5. Deal value in 2015 was heavily influenced by the Heinz / Kraft merger for $53.1 billion, P&G / Coty merger for $16.9 billion and CVS / Omnicare for $14.1 billion.

Megadeals are up for the quarter, but down year-over-year

There were eight megadeals announced in Q3 2016. This was an increase from the six megadeals in Q2 2016, but a slowdown from the 12 megadeals in Q3 2015.

In Q3 2016, deal value for transactions valued in excess of a billion dollars was $26.3 billion, compared with $12.6 billion in Q2 2016 and $56.0 billion in Q3 2015.

Deals above $500 million contributed to the increase in overall retail and consumer deal value in Q3 2016. Transactions below $500 million decreased in both value and volume terms this quarter compared with Q2 2016.